A boost for people who get social security

The New Year ushers in many changes. One important change for most people who receive Social Security or Supplemental Security Income (SSI) payments is a benefit increase in 2008.
The New Year ushers in many changes. One important change for most people who receive Social Security or Supplemental Security Income (SSI) payments is a benefit increase in 2008.

Beginning January 2008, a 2.3 percent cost-of-living adjustment (COLA) will be applied to all Social Security and SSI payments. As a result, the average monthly benefit for a retired worker in January 2008 will be $1,079 (up from $1,055) and the average monthly benefit for a disabled worker in January 2008 will be $1,004 (up from $981). For people who receive SSI, the maximum federal payment amount will increase to $637 (up from $623).

There are other Social Security changes in 2008 that also are worth noting. For example, in 2008, a worker will pay Social Security tax on up to $102,000 of annual earnings (up from $97,500). The tax rates remain the same. Employees will continue to pay 6.2 percent on their wages and the self-employed will continue to pay 12.4 percent on their net earnings. The Medicare tax rate will continue to be 1.45 percent (2.90 percent for those who are self-employed) and there is no limit on the amount of earnings subject to the Medicare tax.

A worker will earn one credit of coverage after paying taxes on $1,050 in earnings (up from $1,000). As always, four credits may be earned each year and a person generally needs forty credits to be eligible for retirement benefits.

To learn more about these changes that will take place in 2008 and to find other important Social Security information, visit the Social Security website at www.socialsecurity.gov